Perhaps increased economic inequality in the United States means that individuals running for office don’t have a very clear understanding of the problems facing people in different circumstances than their own. In particular, they don’t fully appreciate the difficulties many mothers face holding down difficult jobs while caring for young children.

You might assume that highly paid women suffer a bigger economic penalty than other women when they have a baby because, after all, they have more earnings to lose.

In a startling new look at the “motherhood penalty,” however, two sociologists at the University of Massachusetts Amherst, Michelle J. Budig and Melissa J. Hodges, show that mothers with lower earnings suffer the biggest percentage loss in hourly wages.

Their analysis, based on the National Longitudinal Survey of Youth, separates non-Hispanic white women into seven groups based on their earnings and follows them over time, examining what happens to their hourly wages after the birth of a child (the authors limited their analysis to this group of women because of “the complex differences in the shapes of the earnings distributions for African-American, Latina and non-Hispanic white women”). The study also examines the influence of factors such as family resources, marriage and timing of births.
The “motherhood penalty” itself is fast becoming old news (see “A Labor Market Punishing to Mothers” and other blog posts). But the new study is among the first to move beyond a calculation of average effects to examine differences among women from the bottom to the top of the earnings distribution. Professor Budig recently presented their results to the Joint Economic Committee of Congress in hearings on the gender pay gap for women in management (available on video here).

Highly paid women are more likely than women earning less to postpone child-rearing. Early commitment to their careers reduces the economic impact of becoming a mother. But highly paid women also derive significant advantages from greater resources. The ability to purchase reliable child-care services, for instance, makes it easier to maintain high levels of participation in paid employment.

Women with lower earnings are more likely to cycle in and out of jobs, forced to quit if child-care arrangements fall through or they experience a family health crisis. This employment instability tends to lower their hourly wages and may also lead employers to be wary of hiring them.

One cruel aspect of policies in this country is that, as Professor Budig and Ms. Hodges put it, “high-earning childless women hold the most family-friendly jobs” — those with paid family leaves, sick days and vacation time.

Although mothers are underrepresented in the highest echelons, those that reach them derive substantial benefits from family-friendly policies. Indeed, Professor Budig and Ms. Hodges find a motherhood bonus among those in the top 5 percent of the earnings distribution, where having children goes along with increased earnings.

These “supermoms” are often in super jobs (and are able to hire super nannies). The other 95 percent of mothers pay a penalty that increases their economic vulnerability.

More universal family policies, such as early-childhood education, paid family leave, paid sick days and paid vacation time could help most working mothers substantially increase their earnings.

But the very divisions among mothers that Professor Budig and Ms. Hodges observe could help explain lack of political will to implement such policies.

We used to hear that low-income women were having children to get a free ride from public assistance. But mothers depend far more heavily on paychecks than on welfare checks, working long hours at low pay in order to finance their labor of love.

The strict restrictions on public assistance put into place in 1996 did not reduce birth rates, which remained steady at an average of slightly more than two children per woman.

The Affordable Care Act imposes economic burdens that are the equivalent of taxes, an economist writes. Read more…

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